In normal business turnover is based on sales and thus reaching the limit takes time.
But in F&O it reached easily as each lot is valued high, Limit is reached easily. Therefore computation method need be different. Thus for computing turnover limit Following things should be added:
- Profits from the trade
- Loss from the trade
- Premium received from sale of Options
- In case of Reverse Trade, difference should also be added
This can be explained by way of illustration. Below are four Components:
- Profits from the trade – Rs 1,00,000
- Loss from the trade – Rs 1,50,000
- Premium received from sale of Options – Rs 50,000
- In case of Reverse Trade, difference – Rs 75,000
Thus for the purpose of Tax Audit u/s 44AB, turnover will be calculated as : 1,00,000+1,50,000+50,000+75,000 = Rs.3,75,000/-.